Most people in the utility industry agree that a major objective of the smart grid is increased storage capacity. The California Public Utilities Commission (CPUC) recently took a major step in that direction by setting targets for state investor-owned utilities to procure 1.325 gigawatts (GW) of cost-effective energy storage by 2020. The targets are primarily directed at the storage of renewables, excluding large-scale pumped-hydro storage.

This ambitious goal, the largest of its kind ever proposed, will increase California’s installed energy storage capacity six-fold from its current 35 megawatts (MW).

The CPUC’s decision was the result of a two-year regulatory process that studied a multitude of innovative energy-storage technologies to meet the state’s growing grid needs. It concluded that energy storage is vital and should be promptly deployed.

This action sets targets for California’s investor-owned utilities and direct access providers to procure a specified amount of energy storage every two years through 2020 with targets increasing with each procurement. Some energy-storage facilities are expected to come online as early as 2015, meeting needs such as phasing out dirtier power plants, deferring expensive transmission and distribution upgrades, and helping integrate renewables.

Targets were established for Southern California Edison, San Diego Gas & Electric, and Pacific Gas and Electric beginning in 2014, increasing over time. By 2020, the three are expected to have contracted for 1.325 GW of energy storage for their operations with an absolute installation requirement no later than 2024.

Utilities will be allowed to employ energy storage for various functions in the electric power system such as capacity, ancillary services, and peak shaving, which, in turn, will provide data for further market expansion. Energy-storage systems can be deployed in three grid domains: transmission-interconnected, distribution-interconnected and behind-the-meter-interconnected.

While large-scale pumped storage projects greater than 50 MW are excluded from the target, CPUC will hold a workshop to further explore pumped-storage possibilities.